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Recruitment slows "to a standstill"

Overall job creation in the UK is a ‘virtual standstill’, according to a report published today.

721 employers were surveyed by the quarterly CIPD/KPMG Labour Market Outlook (LMO). The biggest finding from the study was that the balance between the proportion of employers expecting to increase staff levels in the next three months and those expecting to cut staff has plunged from +41 in Autumn 2007 to +2 in Autumn 2008.

The marked decline in the demand for labour reflected employer pessimism on the economic outlook. More than four in five employers (83%) responding to the survey expected the economic condition of the UK to deteriorate this autumn - with only 1% expecting things to get better - though respondents were somewhat more optimistic about the outlook for their own organisation (only 25% expecting things to get worse).

CIPD Chief Economist, John Philpott, said: “The year since the impact of the credit crunch was first felt saw the UK labour market move from a state of buoyancy to one of stagnation. We are now at the start of a period of contraction, with jobs being lost, new jobs hard to come by and, as this week’s official statistics are set to confirm, unemployment on an ever sharper upward rise. With pay increases at best modest for those still in work the harsh chill of recession will make this the toughest winter for UK households for almost two decades.”

Andrew Smith, KPMG Chief Economist said: “While the pressures on business to control spending - both on staff and in other areas - are real and intensifying, there has to be a balance between cutting costs now and the risk of lasting damage to the business through inadequate investment for the longer term.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .